Ineffective BC can cost US$53K per minute

Posted On 07 Mar 2014
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The Business Continuity Institute (BCI) has published a report to highlight the cost of common threats to organisations. Entitled ‘Counting the cost” a meta-analysis of the cost of ineffective business continuity,’ the study complies key finding from research around the world that detail how every minute counts when dealing with IT and telecommunications outage, data breach, cyber-attacks and adverse weather conditions. Having in place an effective business continuity management programme can spell the difference between organisational resilience and financial ruin. A recent study by IBM on professionals dependent on high-availability IT, says the cost of an IT/telecommunications outage can vary from US$1.04 million to US$14.25 million over 24 months. Minor incidents, on average, cost US$53,210 per minute of downtime. Further losses due to reputation-related costs can add up to US$5.27 million for substantial incidents. Analysis by the Ponemon Institute reveals that the average cost of data breach and cyber-attacks stands at an average of US$11.6 million annually. Organisations report costs ranging from US$1.3 million to US$58 million to resolve these incidents. Case studies reveal staggering losses of up to US$4 billion due to severe incidents of data breach and cyber-attack. Non-life reinsurance provider, Munich Re, reported that combined household and corporate insurance payouts for weather-related damage in the United States alone cost US$12.8 billion in 2013. Extreme weather phenomena have increased the severity of damage and value of insurance claims. Patrick Alcantara, Research Associate at the BCI and author of the report, comments:” The aim of the report is drive home the message that business continuity is not the sole domain of an organisation’s BC professional. Ensuring an effective, robust BC programme is also the responsibility of management, budget holders and the rest of staff. In a time where cutting budgets is the norm, it is important to be reminded of the cost of being caught flat-footed in an incident. The false economy created by cutting down on business continuity may create bigger problems that may impact on organisational resilience and viability.”

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.